IGI Logo

Nifty : 24918

Technical Outlook

Day that was..

The Nifty surrendered Tuesday’s gains amid profit taking in IT stocks and pressure in PSU banks, Metal names which dragged Nifty 122 points lower to close at 24918. Rate sensitive sectors remained under pressure, while FMCG was a lone gainer ahead of US CPI numbers on Wednesday night that will have bearing on sentiments

Technical Outlook:

* The Nifty had a muted start followed by choppy trading session amid stock specific action. Price action formed a high wave bear candle that broadly remained enclosed within Tuesdays range indicating lack of follow through buying above 25100 levels. Structurally, index retraced 14 session rally by less than 50% over seven sessions indicating slower pace of retracement and consolidation bias in the short term

* Going forward, host of economic data from US and key US federal reserve meet next week will set further tone for markets, while meantime index is expected to consolidate in 24800 band amid stock specific action. Buying dips strategy would be beneficial in historically volatile September month.

* Some key observations which help to shape our outlook are as follows:

* a) Historically, September has been a month with elevated volatility both domestically and globally. However, it is also worth noting that September volatility has been buying opportunity as Oct-dec is usually a good period for equities

* b) Brent prices continue to head lower after breakdown from 10 month consolidation and augurs well from CAD perspective

* c) strong domestic flows for august reiterate the strong domestic liquidity situation and incremental FII flow would be an added tailwind

* d) Below surface many sectors/stocks have witnessed cool off in prices over past month or so and forming a higher base above their long term mean PSU banks is one of the case to consider here

Nifty Bank : 51010

Technical Outlook

Day that was :

Nifty Bank snapped two day winning streak amid weekly expiry and ahead of US CPI numbers which are expected to weigh on sentiments . Index closed session at 51010 , down 262 points or or 0 .30 %

Technical Outlook :

* The index started trading session on muted note amid mixed global cues while late selling pressure in PSU banks dragged the index down and weighed on sentiments . Pric e action for the day formed a small Doji which remained enclosed within previous session range indicating pause after Mondays strong gains and expected to consolidate in the short term . Sustaining above 51400 -51600 zone would indicate strength and extended gains in coming sessions, else consolidation in 51400 -50000 band to continue

* Meanwhile, short term support is now being revised to 50000 levels being a psychological mark and 80 % retracement of August – September gains • PSU banking index has remained under pressure over past couple of sessions . On medium term charts, although index has approached oversold readings and therefore a technical bounce is likely in coming weeks

* Price structure : A) We observe that index is forming sequential lower highs indicating continuation of corrective phase since early July which is seen as retracement of post election rally B) Since beginning of 2024 , after each 15 % rally index has a tendency to correct around 8 - 9 % from highs and in current context 7 % decline is done . Hence going by historical rhythm further correction cannot be ruled out which would eventually result into a strong bottom formation around 200 -day ema around 48500 levels

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631